The term debt consolidation is used to describe the condensing of debt. An individual who owes money to several creditors can use debt consolidation services to mesh the money owed into one lump sum. This then creates one payment, which can then be used to pay off the debt at a faster rate. If you have found yourself falling behind on your debt payments, this might be an option for you. Read on to find out the top ten things you should know about debt consolidation.
Less Monthly Payments
If you had multiple debts, such as credit card payments, you will see your monthly payments cut back considerably with debt consolidation. When you have multiple payments due, it can be easy to fall behind. With less monthly payments, you will be able to stay on track and eliminate your debt.
Lower Amount Due Each Month
When you consolidate credit cards, car loans, lines of credits or even student loans, you will find the amount you owe has been lowered in regards to your monthly payment. We can use the equity in your home to achieve this freeing up your cash flow at the end of each month while paying down the principle owing faster.
Lower Interest Rates
Often consumers are paying higher than normal interest rates due to falling behind on payments or charges to credit cards. These forms of credit are known as revolving credit and the interest rates that comes with them is very high. Moving this debt into your home and it being secured can lower your interest payment by as much as 15%. Effectively you lower how much you pay based on a lower interest rate, paying more towards your principle than ever before.
Simplifying Your Life
Because you have consolidated your debt, you are essentially simplifying your life. Gone are the days when you find multiple bills in your mailbox and you have to figure out what you will pay first. Have all your bills in one payment so you can take care of the debt you owe quickly.
When you get behind on your credit card payments, you will find that you owe fees, in upwards of $40 per debt delay. This can get quite expensive. Eliminate future late fees as well as any fees you may have already incurred by having a debt consolidation pro work for you.
Filing for bankruptcy can be a last resort for many who just cannot seem to pay off debt. Debt consolidation services allow you to work on your debt without filing for bankruptcy but it still remains a viable option if needed. Try debt consolidation first to eliminate your debt without having to file for bankruptcy.
Help From Professionals
With debt consolidation services, you are working with professionals in the finance industry. You are able to have someone knowledgeable assisting you with getting back on track with your finances.